Blackburn said the £16m release clause in Phil Jones's contract was point where negotiations started and not the final fee. Photograph: David Howarth/PA

Blackburn Rovers claim to have forced Manchester United into a compromise over the fee for Phil Jones after finally sanctioning the England Under-21 international's move to Old Trafford.

The 19-year-old agreed personal terms on a five-year contract and passed a medical on a £16.5m transfer last Wednesday only for Venkys, Blackburn's owner, to insist that clubs who met a £16m release clause in the defender's contract were entitled only to open negotiations and not guaranteed to complete a deal at that price. Lawyers from both clubs spent the weekend analysing the wording of the contract Jones was awarded by Rovers in February, with Venkys threatening legal action over United allegedly receiving confidential information about the release clause.

United said they had no case to answer and senior figures at Blackburn sanctioned the deal by allowing Jones to have a medical, only for the club's India-based owner to demand more amid interest from Liverpool, Chelsea, Tottenham Hotspur and Arsenal.

The Premier League champions remain adamant the deal for Jones is £16.5m but, according to a Rovers statement confirming the transfer on Monday, Blackburn "announced a potential club record deal with Manchester United for young England defender Phil Jones". Their club record is the £17m received from Chelsea for Damien Duff in 2003 – Manchester City paid £16m rising to £18m for Roque Santa Cruz but the additional £2m has not been activated – indicating United agreed to add-ons in the final transfer.

Chris Smalling welcomed the signing of Jones by United, saying he is confident of replicating their international partnership at club level. "It's brilliant," he said. "I've really enjoyed playing with him and it's hard to think he's only 19. Phil and I have been pretty good together for many games now. It's been disappointing that Micah [Richards] has not been able to come [to the European Under-21 Championship] but Phil's come in and done really well and we've been able to set our stall out. Hopefully we can play together for a few years."